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Libyan oil production almost back to normal

A cargo ship docks at the port of the Libyan capital Tripoli. Oil exports from Libya are approaching pre-conflict levels and international sanctions have been lifted, but four months after fighting ended, experts warn that Libya's financial situation remains fragile.

This month marks the one year anniversary of the overthrow of Muammar Gaddafi in Libya. Last year, during the civil war in Libya, oil production came to a halt. But today it's mostly back on its feet.

Libya isn't the world's biggest oil producer. But Paul Sullivan, a professor at Georgetown, says it has got a lot of the good stuff, so-called "light, sweet crude."

"It's a lot less expensive to refine light, sweet crude into gasoline and diesel fuel than the heavier crudes," Sullivan said.

Since the 1960s, Libya has exported most of that oil to Europe. Italy is one of the country's biggest customers. But during the civil war, many analysts wondered about what would happen to the country's energy sector.

"I think a lot of people expected that the revolution and the war would really have damaged the oil production," said Robin Mills, an oil and gas consultant based in Dubai.

But they didn't. Libya is producing about 1.6 million barrels a day -- just shy of what it was before the fighting began. Georgetown's Paul Sullivan says all combatants understood the importance of oil to Libya.

"It's not a diversified economy, and clearly both sides in the battle were probably thinking about what's going to happen after," Sullivan said. "We really don't want to ruin everything."

Today, many foreign-owned oil companies are returning to Libya.

"You know, it's not like some of the other, like the Persian Gulf countries, where there isn't a lot of foreign investment already," said Sarah Emerson with Energy Security Analysis. "It was there, and it appears to be coming back."

Even though the government has said it doesn't intend to issue new contracts for a year or two. Sill, Libya has what the oil industry calls "significant downside risk." Case in point, the attack that killed U.S. Ambassador Chris Stevens last month.